The Nigerian economic crisis is getting deeper and there seems to be no succinct plans in sight to curb the continuous degradation of the economy. Nigeria is one of the largest crude oil producing nations and 90 percent of its foreign exchange earnings are generated from crude oil sales.
In June 2008, crude oil peaked at $147.42 a barrel, the highest in the history of the world. Nigerian foreign reserve likewise grew from $45 billion to $63 billion in September 2008 before the global economic situation hit the embattled nation in November 2008, when oil price dropped to $32.40 a barrel.
The problems of Nigeria’s economy was further compounded when U.S oil production increased, and therefore stopped importation from Nigeria in 2014. In December 2014, India (who had replaced the U.S) also reduced its importation by 38 percent to 5.3 million barrels — from 13.7 million in October and 12.4 million in November. China did not import a single barrel for the said month after initially reducing its importation by 50.3 percent.
There were several effects on the economy of Nigeria (home to over 170 million people) for two reasons: firstly, Nigeria only had contractual agreements with a few countries and as such sell on “spot”, two, the country overly depends on crude oil to finance capital expenditures and with crude oil price currently $48.08 a barrel from last year’s peak of $107.64 on June 13th. The question is how would Nigeria avert her economy rout with falling oil price?
Since the drop in oil price globally, the Central Bank of Nigeria (CBN) has adjusted its exchange rate five times, even after the introduction of tight forex controls in February; the latest was on Thursday July 23rd, ahead of Monetary Policy Committee (MPC) meeting. The currency exchange rate is presently 197 to the United States dollar and CBN promised it would be sold to customers through interbank at 198. It’s a different story at the parallel market where Naira is 244 to a U.S dollar.
Data partly gotten from National Bureau of Statistics (NBS) Economic Review and Outlook Report.
In the past months, over 20 states has reportedly failed to pay their worker’s salary, a situation termed a disgrace by the president Muhammadu Buhari who was forced to devise a bailout of $3.4 billion to offset the deficit of the affected states — in an effort to curtail further civil actions from civil servants.
The Nigeria GDP rose to $594.3 billion for the first time in 2014 and became the biggest economy in the whole of Africa. According to report from National Bureau of Statistics (NBS), the service sector contributed the most, 42.6 percent to the total GDP, while industry was 25.6 percent, agriculture and oil sectors made up 20.6 and 11.2 percent respectively. The report shows that service is the fastest growing sector followed by industrial sector. The agricultural sector growth rate has been hindered by lack of finance and limited skilled labour — many preferring to work in the lucrative oil sector of the country.
The economy has been impeded by lack of a diversification strategy that could leverage its vast resources and man-power for growth. Excessive focus on crude oil has created a one way foreign revenue channel, that any slight fluctuation in global oil price (beyond Nigeria’s control) impacts the entire nation. It is obvious that Nigeria cannot continue to depend on oil for growth. The NBS report has shown that oil growth was only 6.3 percent and contributed only 11.2 percent to the entire GDP —the lowest among the sectors. The truth is Nigeria is currently surviving on sectors with less focused attention, but one wonder why due diligence is not done to elevate those sectors in order to create a permanent solution to oil’s unpredictable nature?
Ndubuisi Ekekwe Moves to Deepen Capabilities Through Free Weekly Business Lessons
In a bid to deepen business and individual capabilities across the African continent, Prof. Ndubuisi Ekekwe, Founder of Fasmicro and the Lead faculty, Tekedia Institute, on Sunday said he will commence free business lessons to enhance accumulation of capabilities.
In a message forwarded to all members of the platform, Tekedia.com, Prof. Ekekwe, explained that when businesses accumulate capabilities, they move upstream and create new competitive tentacles which eventually form the foundation of their growth.
“More so, because of the capabilities, they protect their market shares through strategic moats against competitors and new entrants,” he stated.
Prof. Ekekwe plans to send out two business lessons per week to engage Tekedia’s growing community on the mechanics of business systems. “Each piece would be prepared to pass across a business lesson.”
Prof. Ndubuisi Ekekwe writes regularly in the Harvard Business Review and has spoken at global events — explaining and teaching the mechanics of business systems and nation-building.
To start receiving his free business lessons sign up here.
FG Introduces NEXIT Portal for Npower Batch A and B Beneficiaries
The Federal Government has introduced a new online portal for exited Npower beneficiaries of batch A and B.
According to the Minister for Humanitarian Affairs, Sadiya Farouq, the portal was launched in collaboration with the Central Bank of Nigeria (CBN) to enable exited Npower beneficiaries apply for available federal government empowerment options.
This was disclosed in a statement issued by Nneka Anibeze, the media aide to the minister, on Friday.
The ministry said the NEXIT portal will be used to determine the suitability of exited beneficiaries for various CBN-affiliated programmes.
She explained that selection will be based on the conditions and criteria set by the apex bank.
Ms Farouq, therefore, urged interested exited Npower beneficiaries to log on to the NEXIT portal and provide the required additional information for possible placements into central bank’s intervention options.
“The Minister expressed her deep appreciation to the CBN Governor Mr Godwin Emefiele CON for his support adding that the Ministry of Humanitarian Affairs remained committed to the vision of Mr President to lift 100 million Nigerians out of poverty in the next 10 years.
“Minister Umar Farouq pledged the Ministry’s willingness to collaborate with relevant agencies of government and other stakeholders towards the realization of that vision and congratulated the exited beneficiaries while wishing them well in their future endeavours.
“The Federal Government of Nigeria is very proud of the milestones you have achieved during your period of service to the nation. As we prepare to exit into prospective endeavours.”
Ellah Lakes Partner Ondo State Government to Develop Oil Palm, Cassava in the State
The management of Ellah Lakes Plc said it has partnered with Ondo State Government to develop and manage 5000 hectares of land for the purpose of cultivating oil palm and cassava in Ondo State, Nigeria.
The company stated in a statement signed by Kenechi Ezezika, Company Secretary, Ellah Lakes Plc.
Speaking on the development, the Chief Executive Officer, Chuka Mordi said: “This is a significant landmark for the Company in the development of our landbank, & we are very excited to be working with ODSG.
“I am delighted that we are fulfilling our strategic objective of progressively expanding our land bank & diversifying our portfolio and production base. I am also glad to say that the intercropping programme in Edo State is progressing steadily & we have achieved our first milestone of 100Hectares of Cassava with the participation of personnel of the Agricultural Development Program (ADP), in Edo State”.
The Special Adviser on Development & Investment to the Ondo State Governor/ Chief Executive Officer of Ondo State Development and Investment Promotion Agency (ONDIPA), Mr. Akinboye Oyewumi, who also spoke on the development said: “We are pleased with this collaboration with Ellah Lakes Plc., and we look forward to a mutually beneficial, valuable and fruitful venture.”
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